U.S. stock index futures edged lower Thursday, retracing some of the previous session’s gains after the Federal Reserve held interest rates steady but reaffirmed its outlook for two rate cuts this year.
As of 06:10 ET (10:10 GMT):
- Dow Jones Futures fell 75 points (-0.2%)
- S&P 500 Futures dropped 17 points (-0.3%)
- Nasdaq 100 Futures slipped 90 points (-0.5%)
On Wednesday, major Wall Street indexes rallied sharply but remain near six-month lows. Market sentiment remains fragile due to concerns over potential trade tariffs and slowing economic growth.
Fed Holds Rates, Maintains Cut Outlook
The Federal Reserve left its benchmark rate unchanged at 4.25%-4.50%, in line with expectations. Despite persistent inflationary pressures, the central bank reiterated its projection for two rate cuts by year-end, bringing rates down to 3.75%-4.00% in 2025.
However, the Fed also raised its inflation forecast, projecting:
- Core PCE inflation at 2.8% in 2025 (previously 2.5%)
- GDP growth trimmed, citing uncertainty around trade policies
Fed Chair Jerome Powell acknowledged the economic risks posed by Trump’s proposed tariffs, which could further impact inflation and disrupt supply chains. While Powell stated it was “too early” to assess their full effect, the Fed’s forecasts suggest a non-negligible economic impact.
Adding to concerns, Trump reaffirmed his plans for reciprocal tariffs set for April 2, raising fears of global retaliation and a potential trade war.
Jobless Claims, Key Earnings on Watch
Markets now turn to Thursday’s economic data, with investors closely watching jobless claims for signals on the labor market’s resilience—a key factor in the Fed’s rate decisions. Additionally, the Philadelphia Fed manufacturing index is set for release, providing insight into industrial activity.
Key corporate earnings in focus include:
- FedEx (NYSE: FDX) – Analysts expect guidance on U.S. economic conditions and potential revenue challenges.
- Micron Technology (NASDAQ: MU) – Investors seek clues on AI chip demand amid weaker PC and smartphone sales.
- Nike (NYSE: NKE) – Facing a consumer slowdown, Nike is projected to report its largest revenue drop in five years.
With rate uncertainty, trade risks, and inflation pressures mounting, Wall Street remains on edge as investors digest the latest data and corporate outlooks.